Osmotic suction arises in clay soils due to the presence of dissolved salts in soil water. Variations in dissolved salt concentration of soil water impact the osmotic suction balance between soil water (of clay soil specimens) and external reservoir that gets adjusted through diffusion of salts and osmotic flow of water molecules. Available theoretical and experimental studies in literature mostly focus on the behaviour of clay samples reconstituted from slurries. Compacted clays differ from clay samples reconstituted from slurries as they are characterized by both matric suction and osmotic suction. Compacted clays are typically exposed to osmotic suction gradients in landfills and brine ponds where compacted clay liners are in contact with leachate/brine solutions. Upon exposure to solutions, diffusion of salts dissipate osmotic suction gradients, while, absorption of salt solutions in the partly saturated void spaces dissipate matric suction of the compacted clay specimens. The impact of dissipation of matric suction and osmotic suction gradients on the swelling behaviour of compacted expansive clays forms the focus of the present study. Experimental results illustrated that the direction of salt diffusion during dissipation of osmotic suction difference has a significant bearing on the swelling behaviour of compacted clay specimens.